CHP in Data Centers: Barriers and Opportunities

In addition to industry and buildings, combined heat and power (CHP) systems offer an important energy efficiency opportunity for data centers.  However, policy and technology barriers have limited CHP deployment by data centers, leaving them to rely primarily on grid-supplied based electricity for their energy needs and diesel reciprocating engine generators for backup power. Electricity generated from biogas-based CHP systems at wastewater treatment or waste-to-energy plants could furnish data centers with more significant amounts of base and peak load electricity.

Policy Barriers

Data centers interested in implementing CHP systems have faced a variety of challenges to deployment. These challenges are similar to those faced by other institutions interested in implementing CHP or distributed generation technologies. “Utilities can often contribute to a project being easy, difficult, or impossible to implement,” according to Sam Brewer at GEM Energy, a firm that has implemented two micro turbine CHP projects at college data centers. 

Public service commissions (PSCs), which generally set the rules for these types of grid interactions, can place limits on the ability for a utility to make a technical review overly burdensome and prolonged in addition to establishing standard rules that provide clarity to firms considering the technology. A model standard, from the Department of Energy (DOE) or another respected national organization, could provide PSCs the information and confidence to build sensible rules for CHP adoption. Currently, the Public Utilities Commission of Ohio is actively engaged in a pilot project with DOE to remove educational and regulatory barriers to CHP development in Ohio and across the nation.

Technology Opportunities and Challenges

Redundant power systems are necessary for data centers and are designed to provide a high level of reliability even in the event of electricity outages or voltage fluctuations. CHP systems that use natural gas-fired turbines instead of reciprocating engines offer advantages as noted by Sean James and Brian Janous at Microsoft, “Turbines offer many benefits over conventional reciprocating engines, including higher electrical efficiency, lower emissions, and lower maintenance.”  According to Brewer, natural gas also offers an additional advantage in its reliability, “The natural gas system is more fault tolerant. In the electrical system, the command signals are slower than the error.”

However, CHP systems in data centers usually have to operate in conjunction with several other systems that maintain electric reliability. These systems include uninterruptible power systems (UPSs), batteries and reactive load banks or ultra-capacitors and static transfer switching equipment to provide “ride-through” power when there are transitions in electricity sources. Along with the fact that data centers tend to have more than one utility feed, integrating CHP systems with the power reliability assets can be a challenge. According to James and Janus, “Data center loads can shift dramatically and often expectantly depending on the behavior of the users. For instance, a fully anticipated event like a major sporting event can cause the load of data center to spike or drop quickly.” 

Despite these challenges, Microsoft is beginning a pilot project in Wyoming that utilizes a molten carbonate fuel cell to provide power to a small data center using biogas from a nearby wastewater treatment plant using anaerobic digestion. The project, called Data Plant, involved an infrastructure upgrade to the wastewater treatment plant paid for by a $1.5 million Community Readiness Grant that processes the gas to make it suitable for power generation.  An analysis done by the Environmental Protection Agency (EPA) estimated the technical potential for new CHP capacity in wastewater treatment plants at more than 400 MW of biogas-based electricity and about 38,000 MMBtu/day of thermal energy output.    

As both technological and policy barriers begin to be addressed, more companies may be able to consider building or retrofitting data centers for combined heat and power systems or other distributed generation technologies.  According to James and Janous, “We expect that on-site generation, powered by natural gas or biogas, will be a critical component of our energy supply mix in the future, though the exact proportion will depend upon an number of factors including fuel availability, reliability, cost and emissions.”